Why Tesla Stock Belongs in Every Forward-Looking Portfolio

A prominent research firm has ignited fresh optimism around Tesla, with one market expert declaring the electric vehicle maker's shares an essential holding despite acknowledged risks. This endorsement arrives as debates intensify over whether current momentum reflects temporary market enthusiasm or signals the dawn of autonomous technology supremacy.

Melius Research analyst Rob Wertheimer has issued an aggressive buy recommendation, driving significant upward movement for Tesla shares at the week's opening. He contends the company represents a fundamental portfolio component, predicting a dramatic economic transformation within the next five years that will shift hundreds of billions in value creation from legacy manufacturers toward Tesla.

The core of this bullish outlook centers on Tesla's Full Self-Driving (FSD) software. Wertheimer highlights the latest version's uncompromising shift to a purely visual system, combined with years of artificial intelligence training, as creating an almost insurmountable competitive advantage. Rivals increasingly appear unable to match this combination of innovation and cost efficiency.

Hardware Ambitions Extend Beyond Vehicles

Further fueling investor excitement, CEO Elon Musk recently used his X platform to disclose new details about Tesla's in-house chip development. The company's evolution into a hardware powerhouse continues: while the current AI4 chip already operates across millions of vehicles and data centers, its successor—the AI5—nears final design completion ("tape-out").

Should investors sell immediately? Or is it worth buying Tesla?

Although AI5 deployment in vehicles isn't anticipated until mid-2027, the scale of Tesla's ambition remains enormous. Musk aims to launch a new chip design into mass production every twelve months, targeting production volumes that would exceed all other AI chip manufacturers combined. This vertically integrated strategy fundamentally distinguishes Tesla from traditional automakers reliant on standardized solutions.

Regulatory Milestones Support Global Growth Narrative

Beyond future technologies, Tesla continues achieving concrete operational milestones. South Korea became the seventh country to approve supervised autonomous driving (FSD), demonstrating the technology's global scalability. European investors are now watching the Netherlands closely, where regulatory approval is expected in early 2026.

These developments arrive at a crucial moment. After facing pressure last week amid broader technology sector concerns—with shares currently trading around €364—the company appears to be regaining positive momentum. Whether Tesla's transformation from automaker to AI and robotics leader can sustainably drive its valuation will become clearer when fourth-quarter results arrive in late January. Ultimately, Musk's ability to meet his ambitious timelines remains the critical factor.